Two of very interesting posts about VC fund economics are over at Fred Wilson’s joint:
First “Venture Fund Economics” |  Second

A challenge is that my understanding is that Union Square fund has done *much better than average* and therefore you would not want to make generalization about the VC industry from their experiences.    I also need to get some feedback from Fred regarding the time frames he is discussing in the specific example he gives of a fund’s projected performance.

As I noted about some of his Venture Capital observations some time ago it’s very important to make sure you are factoring time into these equations, especially when the time frames are in decades or many years.

Fred points this out in the first post as well, noting that doubling your money is not really that impressive if it happens over a ten year time horizon.    It is critical to always recognize how the current value of money is greater than the future value – the gist of the notion of how “discounting” affects investment and other economic decisions.